India Secures $400 Million ADB Loan to Advance Urban Reform Agenda and Infrastructure Development
- ByStartupStory | November 14, 2023
The central government of India has inked a USD 400 million policy-based loan agreement with the Asian Development Bank (ADB) to bolster its urban reform agenda. This financial support aims to facilitate the creation of high-quality urban infrastructure, enhance service delivery, and promote efficient governance systems.
The agreement for Sub-programme 2 of the Sustainable Urban Development and Service Delivery Programme was officially signed by Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, and Takeo Konishi, Country Director of ADB’s India Resident Mission.
Sub-programme 1, approved in 2021 with a financing of USD 350 million, laid the groundwork by establishing national-level policies and guidelines to improve urban services. Sub-programme 2 takes this further by supporting investment planning and reform actions at the state and urban local body (ULB) levels, according to a statement from the finance ministry.
Juhi Mukherjee highlighted that the program aligns with the government’s urban sector strategy, emphasizing reforms aimed at making cities more livable and fostering economic growth through inclusive, resilient, and sustainable infrastructure.
Supporting the reforms initiated by states and ULBs, Sub-programme 2 aligns with the national flagship program, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0, which focuses on universal access to water supply and sanitation. The program also targets urban water security, promoting water conservation, recycling treated sewage, rejuvenating water bodies, and maintaining sustainable groundwater levels.
The initiative includes integrated urban planning reforms to control urban sprawls and foster planned urbanization through legal, regulatory, and institutional reforms. Capacity building of ULBs and community awareness are integral aspects of this approach.
The comprehensive strategy involves ULBs promoting the modernization of building bylaws, land pooling, urban agglomeration, and comprehensive urban mobility planning through transit-oriented development. This is geared towards transforming cities into well-planned centers of economic growth.
The integrated planning processes will prioritize climate and disaster resilience, nature-based solutions, improved urban environments, and enhanced financial sustainability for cities. The latter involves incentivizing cities to become creditworthy through reforms aimed at boosting revenues, such as property taxes and user charges.
Ultimately, these measures are expected to empower cities to mobilize innovative financing avenues, including commercial borrowings, municipal bonds, sub-sovereign debts, and public-private partnerships. This multifaceted approach is aimed at addressing significant deficits in urban infrastructure investments.
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